“Samyang Foods: Time to focus on the impact of its new China plant” ... “Kakao Corp.: A time for caution until next year’s spin-off” [Stocktopia]

[Financial News] Here is a roundup of reports from major securities firms on the morning of October 21.
Analysts say it is time to focus on the potential for higher sales volumes from the launch of Samyang Foods’ new plant in China next year and possible price increases overseas, rather than short-term foreign-exchange headwinds.
Kakao Corp.’s third-quarter results are expected to fall short of market expectations due in part to the Chuseok holiday, and analysts say investors should wait to see its AI monetization strategy after a planned spin-off in January next year. POSCO Future M, which secured orders for 480,000 tonnes of lithium iron phosphate (LFP) cathode material in just two months, was described as the most noteworthy materials company, given its ability to respond quickly to demand by converting existing production lines.
◆ Samyang Foods (003230)― Yuanta Securities / Analyst Son Hyun-jung
- Target price: 2,000,000 won (maintained) | Previous day’s closing price: 1,221,000 won
- Investment rating: Buy (maintained)
Yuanta Securities maintained its target price of 2,000,000 won for Samyang Foods, saying third-quarter operating profit is expected to meet market expectations and that next year’s higher sales volumes from the launch of its new China plant could be accompanied by the effects of price increases.
Regarding the Jiaxing plant in China, which is scheduled to begin operations next year with annual capacity of 1.13 billion servings, Son identified reallocating production to markets with higher average selling prices (ASPs) as the key point.
He said the China plant “is significant because it will shift China-bound production currently handled by existing facilities in Korea to local production, freeing up domestic capacity that can then be allocated to high-ASP markets such as the United States and Europe.”
With price increases already emerging in some markets amid rising raw-material and logistics costs, he said that if further increases take effect in major overseas markets next year, Samyang Foods could benefit from both higher sales volumes and rising ASPs.
Son said, “This is the time to focus on higher sales volumes and the possibility of price increases stemming from the launch of the new China plant, rather than short-term foreign-exchange headwinds.” The analysis says investors should look at growth drivers obscured by the strong won.
◆ Kakao Corp. (035720)― Korea Investment & Securities / Analyst Ho Yoon Jung
- Target price: 53,000 won (cut 11.7%, from 60,000 won) | Previous day’s closing price: 31,550 won
- Investment rating: Buy (maintained)
Korea Investment & Securities lowered its target price for Kakao Corp. to 53,000 won, expecting the company’s third-quarter results to fall short of market expectations.
The firm expects Talk Biz, KakaoTalk’s advertising and commerce business, to perform poorly due to Chuseok, while Kakao Pay, which has driven growth, is also likely to post somewhat weak results as the value of stock-market trading declines. It also forecast lower music revenue as artist activities decrease amid continued declines in webtoon revenue in the content division.
Commenting on the AI strategy unveiled on the 13th, analyst Ho Yoon Jung noted, “There are two key issues: performance good enough for users to experience tangible benefits, and a payment model for monetization.” As usage increases, so do the computing costs of graphics processing units (GPUs); without a payment structure to cover those costs, the service’s sustainability and quality could deteriorate, he said.
With Kakao Corp. scheduled to split into Kakao AI and Kakao X in January next year, the analyst said investment decisions after the spin-off will be important. Jung said Kakao AI may be more attractive to investors, given its relatively lower valuation burden and potential AI performance, but stressed that “presenting a clear monetization strategy using AI must come first.”※ Equity spin-offA corporate restructuring method in which a specific business division is separated from an existing company to form a new one, with existing shareholders receiving shares in both companies in proportion to their ownership. Kakao Corp. is scheduled to split in January next year into Kakao AI, which will handle the AI business, and Kakao X, which will take over the remaining businesses.
◆ POSCO Future M (003670)― DS Investment & Securities / Analyst Choi Tae-yong
- Target price: 290,000 won (maintained) | Previous day’s closing price: 178,200 won
- Investment rating: Buy (maintained)
After visiting POSCO Future M’s LFP conversion line in Pohang on the 20th, DS Investment & Securities maintained its target price of 290,000 won, saying the company can secure at least 100,000 tonnes of LFP production capacity ahead of time by converting existing ternary cathode material lines.
POSCO Future M secured orders for 480,000 tonnes in just two months—80,000 tonnes from SK On in September and 400,000 tonnes from Samsung SDI in October—securing an average annual volume of 100,000 tonnes. Its first converted line, with capacity of 15,000 tonnes, is set to begin mass production in December. Analyst Choi Tae-yong said, “The line scheduled to come online in 2028 can achieve utilization based solely on orders already secured,” adding, “Converting a line takes six to seven months and costs less than 20 billion won per 15,000 tonnes, so the company can handle additional orders without expanding capacity.”
Addressing views that converting only the downstream stages after calcination first is an incomplete approach, Choi explained that the U.S. Prohibited Foreign Entity (PFE) determination is based on the calcination process, meaning the approach meets the eligibility requirements. He stressed, “With strong demand, addressing supply gaps leads directly to gaining a foothold in the market. That is why timely supply is bound to matter more than completely decoupling from China.”※ Lithium iron phosphate (LFP)LFP is a cathode material made from lithium, iron and phosphate. It has lower energy density than ternary cathode materials that use nickel and cobalt, among other metals, but is cheaper and more stable. It is used mainly in batteries for energy storage systems (ESS), for which South Korea’s three battery makers are increasing orders.※ Ternary cathode materialsTernary cathode materials are made primarily from three metals, such as nickel, cobalt and manganese (NCM). Their high energy density makes them commonly used in electric-vehicle batteries. Analysts say POSCO Future M can convert this production line to LFP because its calcination furnaces were designed to be long.※ Prohibited Foreign Entity (PFE)A provision introduced in the tax-cut law (OBBBA), enacted by the United States in July 2025, bars companies from receiving the Advanced Manufacturing Production Credit (AMPC) if materials produced by companies from certain countries, including China, exceed a specified share. The rule is cited as one reason South Korean battery companies are seeking domestically produced LFP cathode materials.

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